The New Jersey Nets lost $24 million last year, according to a recent filing by one of its top investors.
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The Nets expect their new arena (above) will boost
attendance and the team’s bottom line. |
Forest City Enterprises, the publicly traded real estate company run by Nets owner Bruce Ratner, holds a 21 percent stake in the team but is responsible for around 31 percent of the operating loss in 2006, according to a March 29 filing with the Securities and Exchange Commission.
For the fiscal year ended Jan. 31, 2006, Forest City said the Nets reported a pretax loss of $24.5 million, which includes approximately $16.2 million of amortized assets related to the company’s investment in the team that began in August 2004. The remainder of the loss, or $8.3 million, is related to the operations of the team for the 12-month period ending Jan. 31, 2006, the filing said. Extrapolating the percentage operating loss across the entire Nets ownership structure brings the team’s total cash operating loss to approximately $24 million.
Nets officials refused to comment on the team’s finances.
Ratner, who paid $300 million for the Nets in 2004, plans to move the club into a new Brooklyn arena in 2009. Until then, the Nets will likely continue to lose money, though losses are expected to decrease after this season that has brought a significant increase in average attendance.
Under Nets Sports & Entertainment president Brett Yormark, who Ratner hired last year to revive the historically undermarketed team, the Nets are averaging 16,719 fans per game, up 12.6 percent from last season and 18th among the league’s 30 teams, through April 3. The team’s 13 percent attendance increase is the fourth highest increase in the league, behind the New Orleans/Oklahoma City Hornets’ 28 percent increase, the Golden State Warriors’ 13.1 percent attendance increase and the Charlotte Bobcats at 12.8 percent. The Nets have also seen a 100 percent increase in sponsorship revenue, though team officials would not disclose specific figures.
“I would expect to see the fruit of the [Nets] labors to be reflected in next year’s financial statements,” said Marc Ganis, president of SportsCorp Ltd. “Yormark has done a good job in increasing the gate receipts and a strong playoff run will also enhance the team’s bottom line.”
The Nets clinched the Atlantic Division on April 4, and had a 13-game win steak that put their record at 45-28.
